You should update your business plan more frequently than you think. It’s important to keep that information up to date and in line with the changing goals of your organization. Here are eight situations in which it’s necessary to update your business plan.
Has it been over a year since you updated it? Your business plan is never finished, and you should be constantly reviewing and updating it. A good rule of thumb is to schedule minor reviews quarterly and conduct a major review annually. This way you’ll catch any outdated items and see what’s changed.
Have you added new products or services? Your company’s offerings are an integral part of your business plan, so when they change, your business plan should change as well. Adding or discontinuing products or services affects your sales projections and how you manage company resources.
The competition is changing, so paying attention to what your competitors are doing can help you determine when it’s time to shift your own business strategy. Perhaps a competitor is undercutting you on price or has copied your product or service. Take time to evaluate their strategy and decide whether you want to do anything in response.
Anytime there are changes in the market you should adjust your business plan accordingly. Current issues like inflation or fears of a recession could affect a customer’s ability to buy your product or service. Factors that could negatively affect your revenue warrant a review of your business plan.
It’s a good idea to update your business plan anytime you experience a significant financial change, good or bad. Landing a major client is a great problem to have, for instance. But serving that client may require more time and resources than your team initially planned for. Likewise, if a longtime customer cancels a major contract, that will affect your future revenue. Each of these scenarios requires you to revisit your business plan and develop a new strategy.
Internal changes can require you to update your business plan as well. Suppose you’ve recently switched vendors to deal with supply chain issues. Or maybe you’ve lost a key staff member. You’ll need to rethink how your business will operate differently in response.
Has your company grown substantially? It may have been just you and one or two other employees when you first started your business. It’s time to update your business plan whenever your organization experience either significant growth or contraction. Involving key employees in the review is always a good idea.
You’ll need to provide a detailed business plan if you’re trying to obtain funding from a bank or an investor. Your document should clearly state what your company does and outline your future financial projections. Your business plan should include an executive summary, an explanation of your total available market, and a description of how you plan to use the funding.
All this may sound complicated, but it can be easier if you use a business plan template. Find a free one here: https://www.fundera.com/resources/tools/business-plan-template and keep yours up to date.
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“Let’s Talk Business” is a weekly column of the Emporia Area Chamber of Commerce and Visit Emporia. The mission of the Chamber is to be proactive in creating an environment for business and community success, guided by the vision that positive attitudes promote positive actions. Contact us at 620-342-1600 or email@example.com and visit our website at www.emporiakschamber.org.